. Income Taxes

Domestic and foreign income (loss) before income taxes is as follows (in thousands):

	201 5		201 4		201 3
Domestic	$	1,313	$	35,264	$	20,254
Foreign		105,635		96,382		103,982
Income before income taxes	$	106,948	$	131,646	$	124,236

Federal, state and foreign income tax (benefit) expense consists of the following (in thousands):

Current:
Federal	$	(6,686	)	$	8,003		$	8,265
State		2,078			1,275			2,084
Foreign		17,611			27,438			18,462
Subtotal		13,003			36,716			28,811
Deferred:
Federal and State		11,330			(1,513	)		3,251
Foreign		149			(2,975	)		3,389
Subtotal		11,479			(4,488	)		6,640
Provision for income taxes	$	24,482		$	32,228		$	35,451

The current federal tax benefit for 2015 includes an $11.7 million benefit reclassified from AOCI as a result of the company’s termination of the U.S. defined benefit pension plan as described in Note 12 of the Notes to Consolidated Financial Statements included in this report.

A reconciliation between income taxes computed on income before income taxes at the federal statutory rate and the provision for income taxes is provided below (in thousands):

	201 5			201 4			201 3
Tax expense at statutory rate of 35%	$	37,432		$	46,076		$	43,481
State and local taxes, net of federal tax benefit		1,907			1,186			1,076
Foreign income tax rate differential		(19,853	)		(14,981	)		(15,497	)
Capital loss valuation allowance		—			—			6,085
Tax on unremitted earnings		—			—			(349	)
Mexico manufacturing operations restructuring		4,841			—			—
Nondeductible professional fees		1,011			—			—
Other, net		(856	)		(53	)		655
Provision for income taxes	$	24,482		$	32,228		$	35,451

Deferred income taxes are provided for the tax effects of temporary differences between the financial reporting bases and the tax bases of the company’s assets and liabilities. Significant components of the company’s deferred tax assets and liabilities at January 2, 2016 and December 27, 2014, are as follows (in thousands):

	20 15			20 14
Deferred tax assets:
Accrued expenses	$	19,738		$	27,088
Foreign tax credit carryforwards		1,529			5,299
AMT credit carryforwards		—			167
Accrued restructuring		1,115			124
Capital losses		4,557			4,557
Domestic and foreign net operating loss carryforwards		684			525
Gross deferred tax assets		27,623			37,760
Less: Valuation allowance		(4,557	)		(4,557	)
Total deferred tax assets		23,066			33,203

Deferred tax liabilities:
Tax depreciation and amortization in excess of book		22,747			21,405
Total deferred tax liabilities		22,747			21,405
Net deferred tax assets	$	319		$	11,798

The deferred tax asset valuation allowance is related to a U.S. capital loss carryover which is not expected to be realized. The remaining domestic and foreign net operating losses either have no expiration date or are expected to be utilized prior to expiration. The foreign tax credit carryforwards begin to expire in 2019. The company paid income taxes of approximately $23.3 million, $26.6 million and $30.4 million in 2015, 2014 and 2013, respectively.

U.S. income taxes were not provided on a cumulative total of approximately $367.9 million of undistributed earnings for certain non-U.S. subsidiaries as of January 2, 2016, and accordingly, no deferred tax liability has been established relative to these earnings. The determination of the deferred tax liability associated with the distribution of these earnings is not practicable. The company has three subsidiaries in China on “tax holidays.” The tax holidays begin to expire in 2017. The company expects to be granted extensions. Such tax holidays contributed approximately $2.6 million in tax benefits ($0.11 per diluted share) during 2015 with similar amounts expected in future years while tax holidays are in effect.

A reconciliation of the beginning and ending amount of unrecognized tax benefits as of January 2, 2016, December 27, 2014 and December 28, 2013 is as follows (in thousands):

Balance at December 28, 2013	$	112
Balance at December 27, 2014		112
Increases/decreases for tax positions taken in the current year		—
Additions for tax positions taken in prior years		—
Settlements		—
Lapses of statute of limitations		—
Other		(10	)
Balance at January 2, 2016	$	102

The amount of unrecognized tax benefits at January 2, 2016 was approximately $0.1 million. Of this total, approximately $0.1 million represents the amount of tax benefits that, if recognized, would favorably affect the effective income tax rate in future periods. The company expects a decrease in unrecognized tax benefits in the next 12 months of $0.1 million upon concluding a German tax examination. None of the positions included in unrecognized tax benefits are related to tax positions for which the ultimate deductibility is highly certain, but for which there is uncertainty about the timing of such deductibility. The U.S. federal statute of limitations remains open for 2012 onward. Foreign and U.S. state statute of limitations generally range from three to seven years. During 2015, the company received an examination notice from the Illinois state taxing authority for the 2012 and 2013 tax years as well as the Ohio state taxing authority for the 2012 to 2014 tax years. In February 2016, the company received an examination notice from the Internal Revenue Service for the 2014 tax year. The company is currently under examination in Germany for tax years 2008 through 2010. The company does not expect to recognize a significant amount of additional tax expense as a result of concluding the state, U.S. federal or German tax examinations.

The company recognizes accrued interest and penalties associated with uncertain tax positions as part of income tax expense.